Friday, 18 Mar 2011

Yen Corrects Losses Following G7 Intervention

The Japanese yen began Friday's trading session after a G7 decision to actively intervene in the market in order to weaken the Japanese currency. The Federal Reserve, Bank of Canada, Bank of Japan and European Central Bank have all joined in an effort to sell the yen.

The result of the coordinated intervention was instant, and the yen fell on all fronts. The Japanese currency fell about 150 pips vs. the U.S. dollar and about 350 pips vs. the euro and the British pound.

Today, the yen managed to erase some of its losses. The USD/JPY pair fell towards the 80.75 level. The EUR/JPY dropped to as low as the 114.10 level.

Looking ahead to the following week, traders are advised to follow the news from Japan. Special attention should be given for any update regarding an intervention in the market by the G7. Traders should note that if the G7 will not take any further actions, the yen's bullish trend might proceed.